What is a Sub-prime mortgage?

This type of mortgage is provided by specialist lenders to borrowers who have low or impaired credit ratings. Also termed non-prime, non-conforming or adverse status applicants who can be self employed or full time employed and tend to have experienced the following:

  • Failed to meet past financial commitments, which may have resulted a one-off down-turn in business, a period of redundancy, ill-health, injury or marital break up.
  • A linked debtor name who has no association with you, but may have lived at your address in the past.
  • A County Court Judgement (CCJ) against your name due to non-payment of a bill
  • Ex bankrupt, defaulted on credit or loan payments or even missed several payments on due dates

 

Are there differences between a Sub-prime mortgage and a Standard mortgage?

Because borrowers have impaired or low credit ratings, lenders will only lend to them under certain terms and conditions.

Each case is considered on its merits, using flexible rather than rigid underwriting criteria. However, where specialist lenders are prepared to lend in such cases, the interest charged is usually higher to reflect the extra risk involved.

 

What should I do if I need a Sub-prime mortgage?

If you know you have had financial difficulties or credit impaired status in the past or present, have been turned down by a High street lender, or you are already on a sub-prime mortgage and want to remortgage, the first and most important step is to have a discussion with us to provide you with independent financial advice.

Once we have accessed your credit rating and associated circumstances we will advise you on the most suitable mortgage for your particular requirements and make an application on your behalf to take out a loan based on how much you can afford the value of the property and length of time agreed between you and the lender.

 

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to check your credit rating by obtaining your personal record by accessing one of the following credit referencing agencies website:

You may wish to review your debt issues with the following agencies. Information is available at the Citizens Advice Bureau (CAB) at

www.citizensadvice.org.uk/index/getadvice.htm and www.debtline-online.co.uk/DEBT%20ADVICE.asp

Information from the Consumer Credit Counselling Service (CCCS) can be found at

www.cccs.co.uk/home.htm